Looking strictly at the numbers, 2012 has signified a market in recovery. Consumer confidence is a large component of this. Buyers have confidently been borrowing at historically low rates to purchase highly affordable inventory. Sellers have been more reluctant, mostly put off by weak price movement. That's driven housing supply levels down to nearly nine-year lows. Combine this with a sales mix shifting away from foreclosures, and prices have risen for five consecutive months. Sellers are finally taking note.
Struggling to find high-quality, move-in-ready inventory, buyers are thirsty for listings. Sellers introduced 5,851 new listings to the market, 1.9 percent more than July 2011. Leading the charge, traditional sellers listed 10.9 percent more homes than last year. The number of homes for sale has dropped for 18 consecutive months, down 30.9 percent from last July to 16,806 active listings – marking the lowest inventory reading for any month since December 2003. Months' supply of inventory dropped 43.9 percent to 4.3 months – the lowest reading for any month since December 2005.
The median sales price was up 14.3 percent to $179,950. That's the largest gain since January 2004 and the fifth consecutive month of year-over-year gains. Falling just $50 shy of matching the peak tax credit month of June 2010, July 2012 home prices reached their highest level since October 2008 (excluding June 2010). Competition among buyers and a renewed sense of urgency meant homes spent far less time on the market. Homes sold in 106 days, on average, 27.7 percent faster than last year at this time. Sellers received an average of 95.0 percent of their list price, up 3.6 percent and well above the 88.3 percent seen in early 2011.
Distressed sales accounted for 33.9 percent of all new listings and 34.1 percent of all closed sales. That's the lowest share for closed sales since August 2008. Breaking down activity by market segment, the traditional median home price was up 6.1 percent to $217,700, foreclosure prices were up 10.9 percent to $122,000, while short sales lagged, down 4.4 percent to $129,000. Traditional homes sold for 78.4 percent more than foreclosures and accounted for 65.9 percent of sales volumes, illustrating the large influence of shifting segment market shares on the overall median sales price. The segment-adjusted 10K Housing Value Index rose a more moderate 5.8 percent.